Panel advances bill limiting participation by gas corporation in Walker's alternate gas plan

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JUNEAU, Alaska — The Senate Resources Committee advanced legislation Friday that temporarily would restrict participation by a state-sponsored corporation in an alternate gas pipeline project proposed by Gov. Bill Walker.

The bill, which Walker has said he would veto, could get a vote on the Senate floor next week. House Speaker Mike Chenault, the bill's lead sponsor, said earlier in the day that he was fairly confident legislators would have the votes needed to override any veto.

Supporters of the bill see it as a way to reaffirm the state's support for Alaska LNG, the major liquefied natural gas project the state is pursuing with BP, ConocoPhillips, Exxon Mobil Corp., TransCanada Corp., and the Alaska Gasline Development Corp., and give it a chance to succeed. They say they're worried the governor's new proposal will cast a shadow of uncertainty over Alaska LNG. Critics of the bill say it could tie the state's hands in negotiations on Alaska LNG and that the state shouldn't pin all its hopes on one project.

The bill arose from an opinion piece by Walker in which the governor called for increasing the size of smaller, stand-alone gas line project, initially aimed at providing gas to Alaskans, and turning it into a project that would be capable of exports in case Alaska LNG faltered. Whichever project is first to produce a "solid plan," with conditions acceptable to the state, will get the state's full support, Walker wrote. Or, he said, the two might be combined at some point.

In a letter to Senate Resources chair Cathy Giessel, Walker reaffirmed his commitment to Alaska LNG and repeatedly used the word "back-up" to refer to the alternate project. In the letter, he noted that a decision on whether Alaska LNG moves to its next phase "is out of the State's hands," since any of the partners could pull out. He said having a backup is in keeping with how the companies do business. And he said in high-level conversations with the companies, all have indicated an understanding of his proposal and a willingness to keep moving ahead on Alaska LNG.

During Friday afternoon's hearing, Sen. Bill Wielechowski, D-Anchorage, said he wanted to hear what the companies had to say. He said he considered that critical to the discussion. But Giessel, R-Anchorage, said she hadn't asked them. She disagreed with Wielechowski's contention that the bill constituted a major policy change, saying she believed it merely substantiated the legislation passed by lawmakers last year setting out the state's participation in Alaska LNG.

The committee did hear from Deputy Natural Resources Commissioner Marty Rutherford, who said full-fledged negotiations are under way related to Alaska LNG. She also spoke to many of the points outlined in Walker's letter.

Sen. Peter Micciche, R-Soldotna, said he hoped that parties could reach some sort of agreement over the weekend.

Chenault, R-Nikiski, has said he has been pressing Walker for details on his plan and seeking greater clarity. He said now he has something in writing to look at but still had questions about some of the points made by Walker in the letter to Giessel.

He said he spoke with Walker on Thursday and suspected he would try to talk with the governor again on this issue.

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